Big Data: hype or a useful tool?
Where is the line between Small and Big Data, how the latter is used by Ukrainian companies, and whether there is still a hype around this topic
The wave of interest in big data has finally reached Ukraine. Conferences on this topic are held almost every week, and the demand for specialists is only steadily growing. Unfortunately, many Ukrainian entrepreneurs still do not understand what "big data" is and how it can be useful. Mind tried to understand where the line is between small data and big data, how the latter is used by Ukrainian companies, and whether there is still a hype around this topic.
When do small data end and big data begin? Some experts joke that big data starts where the millionth (last) line of Excel ends. This humorous definition is not far from the official one, which defines Big Data as data sets so large and complex that traditional application software cannot handle them. Therefore, in reality, the boundary between big and small data is very conditional and subjective, and over time and with the development of technology, it will change its coordinates.
To characterize big data, a set of "three v" features is used: their volume, the velocity of new data accumulation and processing, and the variety of data types that can be processed (variety). Later, interpretations appeared with the addition of veracity, viability, value, variability, and visualization.
What are the benefits of big data? In a fundamental report that at one time dramatically increased global interest in big data, McKinsey identified five ways in which big data creates value:
- Transparency – Quick access to the necessary information can significantly reduce operating time and improve quality.
- Ability to experiment to identify needs, identify variability, and increase productivity.
- Population segmentation to tailor actions to a specific audience.
- Human decision-making can be replaced or supported by algorithms.
- Creating new business models, products, and services.
Is there a "hype" around Big Data? Analytical company Gartner, which studies trends and annually releases the Gartner Hype Cycle (which assesses the development and popularity of technologies) in 2015 removed "big data" from the "hype chart", explaining that these technologies have become the norm for corporate IT.
But as it is often the case, such trends reach Ukraine in just a few years. Ukrainian business is beginning to look for ways to optimize and develop business with big data, sometimes unaware that they were using this tool at a more basic level, which in most cases is sufficient for Ukrainian realities. This almost spontaneous interest led to a certain hoax of Big Data, turning it into a "magic wand" that can solve any business problem.
"I think that the hype is not about Big Data, but about the possibility of using analytical models in the business. It seems to me that this will not end, ”said Yevhen Pentsak, a teacher of the “Big Data and Analytics for Business Owners” courses at the Kyiv-Mohyla Business School. "Analytical models in business will increase its efficiency. First, you need to build classic models, and then optimize them with high-frequency and diverse data", – continues the expert.
What do Ukrainian companies do with the data? Many Ukrainian companies are at the stage of unsystematic data collection in the hope that they will be able to benefit in the future. This stage also includes archives from the pre-digital era. However, the increased demand for data science specialists is an indicator that some companies have already moved to the stage of organizing the accumulated data and building analytical, statistical, and machine learning models.
According to Yevhen Pentsak, there is now a request from Ukrainian businesses for business analytics of this typeу:
- Find the factors that affect sales.
- Find the factors that affect consumer reaction to various types of marketing and advertising activities.
- Find the probability of repaying a consumer loan.
- Optimize the pricing model for services, taking into account the prices of competitors.
What happens next? The use of big data in Ukrainian business will soon become the same norm as a corporate website. And while it's not a nostrum, it's a really useful tool that can significantly improve business performance and help to understand customers better.
"Businesses that look ahead will definitely use Big Data, while others will be absorbed by more efficient players. Prerequisites are the entry of international players into the Ukrainian business, increasing the level of competition, and hence the need to increase efficiency”, says Pentsak.
To better understand the specifics of the use of big data in business, Mind recommends taking the course "Big Data and Analytics for Business Owners", which will start on November 15, 2018 at the Kyiv-Mohyla Business School.
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